How to mitigate business risks while scaling up

Within a culture of growth and quick innovation, the risks of privacy compliance and financial management failures is ever present.

The fintech-community shares concern about these risks. This was made known with hundreds attending a recent webinar: How to mitigate risks for your business while scaling up, hosted byDiviPay. DiviPay is an all-in-one virtual credit card and spend management tool.

Special guest Marion Hemphill, General Counsel & Chief Privacy Officer at Australian Red Cross Lifeblood joined Cale Bulgin, Sales & Partners Manager of DiviPay, and Jay Gilden, Co-Founder of Openly, an Australian innovator of tools to help make self-management of privacy easier.

Their insights revealed the costs of the, ‘It can’t happen to me,’ philosophy and what to do to avoid that risk.

Privacy breaches are avoided with better communication between teams and contractors

Marion Hemphill: ‘Siloed teams leave businesses vulnerable. In 2016, Australia Red Cross Lifeblood made headlines for what was labelled as Australia’s biggest privacy breach. It was a bit of a near miss in that it was only one person – who didn’t have bad intentions – that accessed that data.

‘What we learned from that is that the bigger an organisation gets, people who are meant to be operating with the same vision and mission can be pulling against each other.’

The challenge is then how to get communications happening between different parts of the business, in terms of maintaining what is important.

It’s worth asking questions like, ‘Who’s managing suppliers?’ And it’s worth understanding that one model of supply that works for one part of the business might not work for another. If you’re making short-term decisions in the business, ask what that’s going to mean for other parts of the organisation.

Your suppliers must also understand what’s important to you, and then they must keep reaffirming their understanding and evidencing that in their practice as you move forward.

Culture of transparency protects you in the long term

Jay Gilden: ‘Managing people’s data appropriately ultimately falls back on the team culture. If you have a culture of doing things potentially on the wrong side of the line, that’s going to keep happening until something goes wrong.

‘If you have a culture that is built around transparency, trust, and ethics, in pretty much all of your risk strategies, you’re going to have a lot better outcomes as the business grows, because it’ll be passed on through the chains of the different departments.’

A good moral guide is to ask yourself, if it was on the front page of the paper tomorrow, would you be happy to show your clients?

For Openly, a privacy and tech company, the standards are high, just by the nature of what they do, but it’s important to find across each organisation what the acceptable risk is.

To overcome financial risk, don’t put fraud prevention in the ‘too hard basket’

Cale Bulgin: ‘For any business, the risk appetite is always relatively low around financial management. But the current application process for traditional banking products is extremely long and cumbersome.

‘That’s why all too often we see one or two corporate debit or credit cards, in the name of a director or founder, used across the business, which opens an organisation up to lots of risks. We’ve heard of instances where staff have defrauded businesses of tens of thousands of dollars.

‘It just gets to the point where someone in the business goes enough is enough. We need to fix this before something happens. That’s when they talk to us.’

DiviPay mounts a good case for solving these issues, offering businesses access to multiple virtual credit cards for anyone on staff, bound by strict rules on how much can be spent and on what. This can be digitally tracked in real time, giving helpful assurance to finance managers and business owners.

Use technology to ease financial risk

Jay Gilden: ‘Two of Openly’s biggest challenges are funding and liquidity risks. We had an issue early on where we were onboarding a huge number of vendors into the system to either test or provide services for us. Within the tech stack, we weren’t sure where the money was going.

‘We would stop using a piece of tech and keep paying for it for months and months on end, which is obviously a really scary spot to find yourself in.

‘We turned to DiviPay and we’re now better managing our schemes and forecasting our cancellations through DiviPay, and tying it into our other accounting systems’.

There’s genuinely no reason for a business in 2021 to not be using cost-effective technology solutions to manage risk, and to build that culture of compliance really early on, whether you’re a start up or scale up, medium-sized business, or beyond.